In recent decades, Argentina has shown the world that it is a country that often repeats economic formulas that have proven to be a failure. Argentina’s economic history has recorded – among other things – successive devaluations of the Argentine peso, a large amount of taxes on its inhabitants, exchange restrictions on access to the US dollar, and a system that is quite closed to the world in terms of international trade. Interestingly, that set of factors has become, as can be read in social networks and crypto communities, „things that make Bitcoin stronger.
Not surprisingly, crypto currencies could be an option in the face of a possible devaluation of some fiat currencies. This was stated by Argentina in an article by Ámbito, published last May 22.
If Argentina had bought bitcoins in 2009, could it now pay its foreign debt?
The Ámbito publication explained that multilateral bodies such as the International Monetary Fund, the World Bank and dozens of central banks around the world have shown that the coming economic crisis is important. „So far, a 3% decline in the global economy is expected,“ the article noted.
„The governments of the world have done everything possible to try to appease the economic effects of the pandemic, but the truth is that, in some cases, the measures adopted by the States to stimulate the markets can later trigger inflation, devaluation and other elements typical of an economic crisis,“ they added later in the aforementioned publication.
In addition, they indicated that the most used measure until now is the injection of capital to the markets, which is nothing more than monetary issue. And they clarified that printing Bitcoin Up money without support to help overcome the crisis is a solution that can work in the short term. However, in the long term it is a measure that generates inflation and makes currencies lose value. „The equation is simple, the more quantity of a good (money, for example) the less value it will have because the fact that there is more quantity means that it is now easier to access it,“ commented from Ámbito.
Broadcasting in Argentina: a recurring problem
On Tuesday, August 18, an article in El Cronista, signed by Mariano Gorodisch, focused precisely on the problem of the indiscriminate issuance of fiat money in Argentina.
„The Central Bank reiterated that it will act with all its available tools in the face of possible excesses of liquidity that could emerge in the coming months, as a consequence of monetary expansion, in order to provide credit to families and companies to cope with the pandemic,“ wrote Gorodisch
It should be taken into account that the issue of Argentine pesos has been very strong during this year, with all the inflationary problems that this can generate, and therefore the loss of purchasing power for the population that uses Argentine pesos.